NACCIMA criticises CBN’s monetary policy

The Nigeria Chamber of Commerce, Industry Mines and Agriculture (NACCIMA) has made a case for a single-digit interest rate, describing the Central Bank’s 12 per cent Monetary Policy Rate (MPR) as unhealthy for the economy.

It also warned the Federal Government against increasing fuel price. Rather than increasing fuel price, it implored the government to recover the $29million the Mallam Nuhu Ribadu-led Petroleum Revenue Special Taskforce said the international oil companies are owing.

Briefing reporters, NACCIMA President, Dr. Demola Ajayi said: “Avoid fuel price increase. The government should compile actual quantities sold through petrol station pumps and do all that would enable us to compare with total claims of refineries.

“The government should be determined to recover by legal means funds, such as the US$29 billion,which the Ribadu-led Committee was quoted as recoverable payments from International Oil Companies (IOCs).”

Ajayi urged the government to privatise the refineries and encourage the establishment of private ones.

Criticising the MPR of the Central Bank of Nigeria (CBN), Ajayi insisted that the only way CBN could help the economy is to bring the interest rate to a single-digit index.

He said: “The CBN governor has said the apex bank will still maintain the 12 per cent MPR. I don’t think this is good enough.We have to work with CBN governor as Nigerians and watch it closely because I am sure as things go on, the CBN will want to look at this interest rate thing.

“We feel that industry can only move forwards, especially in the commercial world, referring to the private sector, when access to fund, cost of borrowing are moderate or they are affordable. It makes the economy to move upwards. So, we are hoping that the interest rate will be examined from time to time, depending on what is happening in terms of Gross Domestic Product (GDP) and other factors.”

He urged the Federal and state governments to cut down on external borrowing, saying this is necessary to keep the economy on a clean slate.

He said: “The Federal and state governments must curb the high propensity for borrowing from abroad, except from international institutional lenders, such as IMF, African Development Bank, World Bank and International Finance Corporation and only for specific developmental projects.

“They must also accelerate payment of local debts owed indigenous businesses to enable them to expand, generate wealth and create jobs. This is only fair if treated with same attitude shown in collecting debts owed governments.”

Ajayi asked the Federal Government to make its position known on unclaimed dividends, including the establishment of an Unclaimed Dividen Trust Fund.

The NACCIMA chief, who said there is hope for increased economic fortunes for the country this year, advised the Federal Government to consider friendly incentives to woo companies into the country.

He said: “The Federal Government should provide adequate industry-friendly incentives to woo back companies that have relocated or are at the verge of relocating to neighbouring ECOWAS countries by boosting the power supply situation and addressing other constraints faced by them.”

Ajayi said epileptic power supply by the Power Holding Company of Nigeria (PHCN) has increased the cost of doing business in the country to 40 per cent.

He said: “Recently, we are worried that in spite of the recent high tariff charged by the PHCN, electricity supply is yet to reduce the burden of private generators for businesses and the citizens since the government’s intention to meet the 6,000MW to 10,000MW has been difficult.

“This has contributed as always to the high cost of doing business estimated at about 40 per cent since real sector operators and citizens alike depend mostly on own provision of alternative sources of electricity through own generating plants.”

He called on the Federal Government to cooperate with private sector to deliver 10,000MW by the end of this year, as well as make provision for sufficient pre-paid meters to consumers.